Energy bill targets fuel efficiency

WASHINGTON  President Bush, who has said he doesn’t believe the government should set arbitrary automobile mileage standards, signed into law a requirement that motor vehicles meet an average 35 miles per gallon by 2020.

Congress sent an energy bill to the White House late Tuesday—delivering it in a gas-hybrid sedan—that increases the federal auto mileage requirement for the first time in 32 years and also requires a huge increase in the use of ethanol as a substitute for gasoline.

The measure passed by veto-proof majorities in both houses. The House passed the bill 314-100, with 95 Republicans joining Democrats in support of the legislation, after the Senate approved it last week 86-8.

With separate minimum standards for cars and light trucks, the bill requires the auto industry to achieve an average of 35 miles per gallon for all vehicles, including SUVs and small trucks, by 2020, about a 10 mpg increase from what those vehicles get today. While all vehicles from small sedans to large SUVS must make some improvement in fuel economy, the required improvements may vary among vehicle classes as long as the overall industry average is 35 mpg.

The General Motors assembly plant in Janesville builds full-size sport utility vehicles, which long been have labeled as gas guzzlers in fuel efficiency debates.

For the last several months, GM and other domestic automakers had lobbied for the segregation of cars and trucks. Requiring a fleet average that doesn’t recognize inherent differences between cars and trucks would force the Big Three automakers to drastically cut the number of trucks they build in favor of smaller, more fuel efficient cars, they said.

Dubbed "transplants" in the industry, the foreign-based automakers would have a fleet average advantage because they build far more small cars in the United States than they do big trucks, the domestic automakers said, arguing that with limited production of high-profit trucks, domestic automakers would be forced into production of smaller cars, most likely overseas.

Rep. Paul Ryan of Janesville was one of the Republicans voting against the bill.

"Although it’s not as bad as earlier proposals that Congress considered, this bill still puts U.S. automakers at a competitive disadvantage compared to foreign manufacturers," Ryan said. "CAFE rules ought to be made on the basis of vehicle class—not manufacturer—if we want to have a level playing field. The bill also fails to clear up uncertainty about the role of the EPA, which could create problems for our automakers if they receive conflicting regulations from different government agencies."

With the segregation of cars and trucks achieved, GM commended Congress and Bush for passage of the energy bill.

"The new fuel economy standards within the bill set a tough, national target that GM will strive to meet," Rick Wagoner, GM’s chairman and CEO, said in a statement. "We will focus our engineering and technical resources to attain these standards, and we remain hard at work applying the innovation and developing the advanced technologies that will power tomorrow’s cars and trucks."

The White House said Bush signed the measure today at a ceremony at the Energy Department.

"This is a choice between yesterday and tomorrow" on energy policy, declared House Speaker Nancy Pelosi, D-Calif., who personally had conducted the sometimes testy negotiations that led to the bill’s approval in the House.

Democrats said the legislation represents a turn away from fossil fuels to using more renewable energy sources and put greater emphasis on conservation.

It increases energy efficiency "from light bulbs to light trucks," said Rep. John Dingell, D-Mich., a longtime protector of the auto industry who was key to a compromise on vehicle efficiency increases.

The bill also calls for:

-- A sixfold increase in ethanol use to 36 billion gallons a year by 2022, a boon to farmers. Of that, 21 billion gallons will have to be from feedstock other than corn such as prairie grasses or wood chips.

-- Improved energy efficiency of appliances such as refrigerators, freezers and dishwashers, and a 70 percent increase in the efficiency of light bulbs.

-- Energy efficiency improvements in federal building and new efficiency standards for construction of new commercial buildings with an aim that they produce as much electricity as they use.

The new lighting standards alone are projected to lower consumers’ annual electricity bills by $13 billion in 2020, remove the need for 60 mid-size power plants and reduce emissions of carbon dioxide, the leading greenhouse gas, by 100 million tons a year, said the advocacy group Alliance to Save Energy.

Democrats said the fuel economy requirements will save motorists $700 to $1,000 a year in fuel costs and reduce oil demand by 1.1 million barrels a day when the fuel-stingy vehicles are widely on the road.

The overall bill, including more ethanol use and various efficiency requirements and incentives, will cut U.S. oil demand by 4 million barrels a day by 2030, more than twice the current daily imports from the volatile Persian Gulf, Democrats said.

But some Republicans complained the legislation fails to address the need for more domestic production of fossil fuels, especially oil and natural gas.

"What we have here is a mandatory conservation bill," said Rep. Joe Barton, R-Texas. He argued that the auto fuel efficiency requirements and the huge increase in ethanol use might not prove to be technologically or economically possible.

Earlier this year, Bush announced his own plan, which he said was aimed at cutting U.S. gasoline use by 20 percent in 10 years. Like the legislation passed by Congress, the president’s plan included a sharp increase in ethanol use. It also urged Congress to overhaul fuel economy rules to give auto companies more flexibility, some of the provisions lawmakers adopted.